Rental Property Loans in California

Refinance and Purchase Financing for 1-4 Unit Rental Properties.

Owning a home as a primary residence can be a great investment in your financial future — but owning a rental property can further build your wealth and possibly help you earn extra income every month. In California especially, where home values are typically strong, owning a rental property can be quite lucrative.

At Empower Capital Group, we can assist consumers looking for financing to purchase or refinance 1-4 unit rental properties. Our commitment to excellent, personalized service and competitive rates sets us apart from many other lenders and our familiarity with the California’s various real estate markets makes us a leading choice for real estate investors throughout the Golden State.

To get started, review the FAQs below on rental property loans in California, and reach out to us when you’re ready for your free, no-obligation rate quote.

Contact us today for a free quote and California mortgage consultation.

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Rental Property Loan FAQs

Rental property loans are mortgage programs designed to help home buyers finance the cost of purchasing real estate that they intend to rent out to other people. Investment property loans are typically used for homes that are occupied by long term renters, but they may also be used to finance vacation rental properties.
Just about any type of home can be financed with a rental property mortgage. In California, there are many options for housing, including single-family houses, townhomes, condos, manufactured homes and 2-4 unit multi-family homes. Talk to one of our rental property loan advisers for more information.
To qualify for one of our California rental property loans, borrowers will need to meet certain credit and income guidelines. Rental property mortgage lenders generally want to look at a borrower’s credit score, loan-to-value (LTV) ratio and debt-to-income (DTI) ratio. In order to get the best pricing, borrowers should aim to keep their credit scores high (720 or higher is preferable), and their DTI ratios low. As for the LTV, making a substantial down payment (at least 20%) will likely put you in a favorable position for approval.

Keep in mind that this is just a basic overview of rental property mortgage guidelines, which can vary. Talk to one of our mortgage experts for a detailed, personalized overview of our rental property loan requirements.

When applying for a rental property loan, you may be able to count the projected monthly rent to help you qualify; however, this may not be allowed if you are living in any part of the property. For example, if you buy a duplex and plan to rent out one unit and reside in the other, the home will likely be considered your primary residence (even though you’re renting part of it out). Using projected rental income is typically only allowed for investment property loans.

What are the Differences Between Rental Property Loans and Second Home Loans?

Rental property loans (or investment property loans) are used to finance the purchase of a home that is not used by the owner as a residence. In most cases, these loans are used for long term renters (where the tenant actually takes up residence in the home, i.e. lists it as their home address, has utilities put in their name, etc.).
A second home loan is used to finance the purchase of a home that is used by the owner as a second home/vacation home. In many cases, the owner may be allowed to rent out the second home to short term renters; however, the renters are usually not allowed to take up residence in the home and the owners usually have to occupy the home for personal use for a certain period of time each year. Projected rental income is generally not allowed to be used toward loan qualification for second home mortgages.